Red bills, green gas
Katy Brown sheds some light on the companies that supply
our homes with the gas we need for heating and cooking.
You can choose to buy gas from one of the big six suppliers,
or from one of the emerging smaller companies, all of which also sell electricity.
Climate Change
Natural gas is a fossil fuel and therefore carbon dioxide is released when
it is burnt. It is however more efficient in terms of the amount of energy
produced per tonne of CO2 released to the atmosphere than either coal or
oil. Unlike electricity, mains gas can’t, at least at the moment, be
procured from renewable sources, so the key to minimising its climate impacts
lie in reduction.
Carbon Offsetting
Five of the companies on the table offer customers the option of offsetting
the carbon emissions produced by their gas use with at least one of their
tariffs. Climate Aware from British Gas (Centrica) and Utilita’s Planetsaver
tariff achieve this through affinity deals with Climate Care. Equigas customers
can offset their CO2 emissions through EBICo’s own carbon offset service
Equiclimate. EDF customers can sign up to its Climate Balance tariff, partnered
with Climate Care and the Carbon Neutral Company. Both Climate Care and
Carbon Neutral received greenwash warnings in the report on Carbon Offset
companies in the issue 107 of Ethical Consumer, while Equiclimate was one
of the Best Buys.
Scottish & Southern says it will plant 6 trees for each of its Power2
‘green’ tariff customers. However, last year the company was ordered
by the Advertising Standards Authority to withdraw a misleading ‘carbon
neutral’ leaflet as, although it could provide figures on average household
emissions, it could not provide sufficient proof that the number of trees
planted would match or exceed these emissions.(18) However, even one of
the companies offering such offsetting has a word of warning. It states
on EDF’s website that ‘offsetting isn’t an excuse to pollute.
It’s a way to take responsibility for pollution we can’t avoid.
We must all do our bit to reduce the amount of energy we use as much as
we can...’(19)
Reducing Consumption
In 2004 there was a change in government regulations which allowed companies,
which were previously obliged to allow customers to change supplier after
a 28 day notice period, to lock customers into annual contracts if they
could demonstrate improved customer energy efficiency of at least 9%.(24)
In other words, the government was offering an incentive for companies to
invest in their customers. None of the big six companies chose to take advantage
of this change in regulations.(25) Utilita was set up in response to this
with the aim of offering customers increased domestic energy efficiency,
reducing household carbon levels and helping customers save money.(25) The
company conducts an energy survey of every customer’s home and offers
‘planetpoints’ for fuel used which can be exchanged for a range
of energy saving measures, including energy saving lightbulbs, loft and
cavity wall insulation and condensing boilers.
Of the larger companies, EDF is currently the only supplier to offer its
customers an incentive for energy reduction through its Read Reduce Reward
scheme. Customers are encouraged to take their own meter readings and in
return receive Nectar points. If they consume less fuel in the second year
of their involvement in the scheme they are also rewarded with extra points.(23)
British Gas, owned by Centrica, has recently launched a green business
arm which will advise homes and businesses on how to become greener and
provide them with the necessary products and services. The company already
offers insulation services and energy saving reports. In future, customers
will be offered solar panel installation for water heating for £4,300.
Partnerships with six local authorities mean that in some areas customers
who have the panels fitted will qualify for a one-off £300 council
tax reduction.(3)
In 2005/06, of the ‘big six’ energy suppliers only Centrica and
Scottish Power met the government’s renewable energy obligation solely
through presenting ‘renewables obligation certificates’ (ROCs),
which serve as proof of renewable electricity generation, rather than having
to ‘buy out’ (essentially pay a fine to the government) for the
proportion of renewable energy they could not generate themselves.(22) While
it is sad that what sets these two apart from the other companies is merely
the fact that they are meeting the government’s minimum requirements,
it is at least a quantitative way to differentiate between the larger companies
on the table.
Fuel Poverty
According to Help the Aged, nearly 160,000 older people in the UK have died
from ‘cold-related illnesses’ such as bronchitis and strokes since
the year 2000.(1) Recent price increases, partly caused by the UK’s
reliance on imported gas from other countries, have been passed onto consumers,
worsening the situation. However, wholesale prices have recently fallen
again and criticism has been levelled at the energy companies by Ofgem,
citing what it describes as the ‘uncomfortable lag’ between cuts
in wholesale prices and consumer bills. Tom Clarke, MP for Coatbridge, Chryston
and Bellshill in Lanarkshire has accused the big energy companies of forcing
people to choose between heating and eating.(2)
A coalition of consumer groups, including Energywatch and Help the Aged,
last year charged energy suppliers with making poorer people pay more for
gas and electricity, with elderly people among those suffering most. According
to the coalition, customers with prepayment meters were paying up to £173
more for gas and up to £113 more for electricity per year than those
paying quarterly. The coalition is calling for the six big energy firms
- British Gas, EDF Energy, Npower, Powergen, Scottish Power and Scottish
and Southern Energy - to make prepaid meter tariffs the same as those for
quarterly bills.(1)
Equigas
Equigas was launched in 1999 to provide a solution to such fuel poverty.
Instead of penalising pre-payment meter users, which are usually low income
households, Equigas charges everyone at the same rate, regardless of how
much they use or pay. Instead of offering direct debit customers a discount
associated with the savings this payment method results in, the savings
are shared amongst all of its customers.
Nuclear
Of the companies on the table, Utilita, Scottish & Southern, Ebico and
The Utility Warehouse receive no criticisms for involvement in nuclear power.
Scottish Power, which has recently been taken over by Spanish energy company
Iberdrola, had cautioned the government against becoming too pro-nuclear,
in response to the Department of Trade and Industry’s energy review
consultation. It said it did not think the review should announce a need
for major nuclear construction at the moment. Iberdrola, on the other hand,
is a member of a number of pro-nuclear lobby groups. It remains to be seen
whether Iberdrola’s purchase of Scottish Power leads to the company
joining other UK energy companies in lobbying for an increase in nuclear
power generation.(4)
Links
www.ethico.com
provides a switching service for mainstream gas companies using some data
from ethical consumer in its ethical ranking.
Help the Aged 207-221 Pentonville Road, London N1 9UZ, tel: 020 7278
1114.
www.helptheaged.org.uk,
email: info@helptheaged.org.uk
Energywatch helpline 08459 06 07 08,
www.energywatch.org.uk
References
1 www.helptheaged.org.uk 3/05/07
2 www.which.co.uk, 23 January
2007 ‘Heating or eating choice “puts lives at risk”’
3 The Guardian, 19th April 2007
4 www.nuclearspin.org 3/05/07
<
b>5 Reality or rhetoric? Green tariffs for domestic customers. The
National Consumer Council, December 2006
6 Hazards: 97, 1 January
2007
7 Friends of the Earth International/Link: European Investment
Bank special, January 2006
8 ENDS Report: 383 (December 2006)
9
WWF Reports: Dirty Thirty- Europe’s worst climate polluting power stations
(2005)
10 BBC News Website www.bbc.co.uk: Chemical firms face cartel
probe, 22 August 2005
11 ‘EDF and Climate Change’ EDF Environment
Council, located at www.edf.com 26/04/07
12 Probe International in
the News email: Bankrolling Nam Theun 2: Laotian dam a test of World Bank’s
credibility, 31 March 2005.
13 Workplacelaw.net: Scottishpower fined
£400,000 over employee death, 31 August 2006
14 ICFTU:28 June
2002
17 ENDS Report:369 (October 2005)
18 The Carbon Neutral
Myth, Carbon Trade Watch.
19 www.edfenergy.com 9/05/07
20
The Guardian, 21st February 2007, 6th March 2007.
21 www.greenoxford.com
9/05/07
22 Renewables Obligation: Annual Report 2005-06
23
EDF Press release 10/06/05
24 Testing domestic consumer take-up of
energy services: direction to initiate trial suspension of 28 day rule:
Explanatory document, Ofgem, May 2004
25 conversation with Hannah
Pearce, Utilita press spokesperson, May 2007.